FREMONT, Calif.--(BUSINESS WIRE)--Tailored Brands, Inc. (NYSE: TLRD) today announced that it has closed the sale of its corporate apparel business to a group led by the existing corporate apparel U.K. executive team for total cash consideration of $62 million, subject to certain working capital adjustments. Of the $62 million in total consideration, approximately $56 million was received upon closing and approximately $6 million is deferred to the first quarter of fiscal 2020.

“We are pleased to have reached an agreement to sell our corporate apparel business. The consummation of this transaction supports our previously stated strategy to focus on our core retail business in the U.S. and Canada while reducing debt,” said Tailored Brands President and CEO Dinesh Lathi. “We thank the management team and employees for their many contributions and wish them well.”

The Company will use cash proceeds from the transaction to reinvest in its business in accordance with the provisions of its term loan. This will free up funds previously slated for capital expenditures for debt reduction.

The transaction represents a multiple of 4.3 times fiscal 2018 Adjusted EBITDA for the corporate apparel business, which had net sales of $235.4 million in fiscal 2018. Please see the reconciliation of adjusted EBITDA for the corporate apparel business, a non-GAAP financial measure, to the GAAP financial measure in the table at the end of this press release.

The Company was advised on the transaction by Edwin Coe LLP and Vorys, Sater, Seymour and Pease LLP. Houlihan Lokey, Inc. served as financial advisor to the Tailored Brands Board of Directors.

(1)In the second quarter of fiscal 2019, adjusted diluted EPS excludes net charges of $10.4 million comprised of $8.1 million of charges related to our multi-year cost savings and operational excellence programs (consisting of $6.1 million of consulting costs, $1.9 million of severance costs and $0.1 million of lease termination costs) and $3.2 million of costs related to the closure of a distribution center in Canada primarily from the write-off of rental product, offset by a $0.9 million net favorable adjustment primarily related to a derivative instrument entered into for our corporate apparel business. Please see the reconciliation of adjusted diluted EPS, a non-GAAP financial measure, to the GAAP financial measure in the table at the end of this press release.

Fiscal 2019 Second Quarter Results

For the fiscal 2019 second quarter, the Company expects to report net sales in the range of $787.0 to $789.0 million, GAAP diluted EPS in the range of $0.64 to $0.66 and adjusted diluted EPS in the range of $0.78 to $0.80, which is above the Company’s expected adjusted EPS range of $0.65 to $0.70 provided on June 12, 2019. The Company noted that its updated adjusted EPS guidance includes a $0.02 benefit from a lower-than-anticipated effective tax rate. In addition, the Company expects to report comparable sales for each of its retail brands in line with its outlook provided on June 12, 2019.

“We are pleased to provide updated guidance for second quarter adjusted EPS that is above our previous outlook,” said Tailored Brands President and CEO Dinesh Lathi. “We remain focused on improving our performance by transforming our customer experience through three key strategic initiatives: delivering personalized products and services, inspiring and seamless experiences in and across every channel, and brands that stand for more than just price. We look forward to sharing more about our progress on these initiatives on our upcoming conference call in September.”

The Company’s anticipated fiscal second quarter adjusted diluted EPS excludes net charges of $10.4 million comprised of $8.1 million of charges related to our multi-year cost savings and operational excellence programs (consisting of $6.1 million of consulting costs, $1.9 million of severance costs and $0.1 million of lease termination costs) and $3.2 million of costs related to the closure of a distribution center in Canada primarily from the write-off of rental product, offset by a $0.9 million net favorable adjustment primarily related to a derivative instrument entered into for our corporate apparel business. Please see the reconciliation of adjusted diluted EPS, a non-GAAP financial measure, to the GAAP financial measure in the table at the end of this press release.

Conference Call and Webcast Information

As previously announced, Tailored Brands will report its fiscal 2019 second quarter results on Wednesday, September 11, 2019 after market close.

At 5:00 p.m. Eastern time on Wednesday, September 11, 2019, management will host a conference call and webcast to discuss fiscal 2019 second quarter results. To access the conference call, please dial 201-689-8029. To access the live webcast, visit the Investor Relations section of the Company’s website at http://ir.tailoredbrands.com. The webcast archive will be available on the website for approximately 90 days.

About Tailored Brands, Inc.

As the leading specialty retailer of men’s tailored clothing and largest men’s formalwear provider in the U.S. and Canada, Tailored Brands helps men love the way they look for work and special occasions. We serve our customers through an expansive omni-channel network that includes over 1,400 locations in the U.S. and Canada as well as our branded e-commerce websites. Our brands include Men's Wearhouse, Jos. A. Bank, Joseph Abboud, Moores Clothing for Men and K&G.